The Advocate General of the European Court of Justice issued an interesting Opinion on the dispute L'Oréal vs. eBay relating to the purchase by eBay of keywords (e.g. AdWords keywords) identical to L'Oréal's registered trademarks linking to eBay listings offering for sale both infringing goods and non-infringing goods and whether eBay could be deemed liable for the trademark infringement performed through the goods traded on its platform.The Advocate General held, among others, that:
"if the nature of an operator as a marketplace is sufficiently clearly communicated in the ad displayed with the search results of an internet search engine, the fact that some users of that marketplace may infringe a trade mark is as such not liable to have an adverse effect on the functions of quality, communication and investment of that trade mark".Therefore, eBay's purchase of the keywords does not trigger per se a trademark infringement and therefore eBay would not be liable for the infringements performed by its users. Also, the Advocate General added:
"If the use complained of by the trade mark proprietor consists of the display of the sign on the website of the operator of the electronic marketplace itself rather than in a sponsored link on the website of a search engine operator, the sign is not used by the operator of the electronic marketplace ‘in relation to’ the infringing goods within the meaning of Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation No 40/94".Indeed, with reference to the eBay's case, the "searches relate to listings stored by the users of the marketplace", while in the case of search engines, such search engines have stored the Internet pages.
It is also very interesting the opinion of the Advocate General for its view on the requirement of the "actual knowledge" of the unlawful activity that would oblige - according to the E-Commerce Directive 2000/31 - the hosting provider to "take down" (i.e. remove) the unlawful material from its website. The Advocate General held that 2 conditions need to be fulfilled to meet the "actual knowledge test":
- the service provider must have actual knowledge of, and not a mere suspicion or assumption regarding, the illegal activity or information [and] legally ‘knowledge’ may refer only to past and/or present but not to the future; and
- it is not enough that the service provider ought to have known or has good reasons to suspect illegal activity and this is also in line with Article 15(1) of Directive 2000/31 which forbids the Member States to impose on service providers general obligations to monitor the information they transmit or store or to actively seek facts or circumstances indicating illegal activity.
It is interesting the reference by the Adovocate General only to past and/or present infringements, even though he also states that if the same infringement is performed in the future by the user with reference to the same trade mark, an electronic marketplace is meant to have knowledge of such infringement. On the basis of the same interpretation the Advocate General held that rightsholders can require the issue of an injunction under Article 11 of the Enforcement of IPRs Directive 2004/48/EU obliging the hosting provider to prevent future infringements performed by the same user in relation to the same trademark.
This conclusion is arguable as it would oblige hosting providers to monitor the activity performed by the users of its platform which might be deemed in contrast with Article 15(1) of Directive 2000/31 which forbids to impose on service providers general monitoring obligations. Indeed, Italian law prescribes that the issue of the above mentioned injunction cannot be in contrast with the provisions of the E-Commerce Directive that will prevail (i.e. no monitoring obligation on the service providers can be triggered as a consequence of the issue of the injunction).
It is necessary to stress that the Opinions of the Advocate General are not binding on the European Court of Justice and it will be interesting to see the view of the court on the case in particular with reference to the possibility to issue injunctions relating to future breaches. Do you want to discuss about this opinion? Feel free to contact me, Giulio Coraggio.